Chattanooga gets loan for sewer repairs

NASHVILLE - Armed with a $33.1 million state loan, Chattanooga is kicking into gear to address a $250 million federal consent decree to fix long-standing sewer and stormwater runoff problems.

The money will pay for various improvements under last year's consent decree, including an $18 million overhaul of East Brainerd's sewer basin that includes a new pump station and new lining throughout the area's sewer system.

Tennessee Local Development Authority members recently approved the 20-year loan, which is coming from the state's Clean Water State Revolving Fund and carries a 1.15 percent interest rate.

City Council members agreed in January to move ahead with those projects after the city signed the consent decree with the U.S. Environmental Protection Agency, the U.S. Justice Department, the Tennessee Department of Environment and Conservation and state Attorney General Robert Cooper.

The Chattanooga Times Free Press reported last year that Chattanooga had dumped more than 354 million gallons of raw sewage into the Tennessee River since 2005.

Daisy Madison, Chattanooga's chief financial officer, said the interest rate from the state is "the best deal in town" -- lower than what the city would have paid had it issued bonds for the projects.

Alice Cannella, director of Chattanooga's Waste Resources Division, said most of the projects are in the design stage.

"This is going to be some sewer line rehabilitation projects and some upgrades in the wastewater plan, also," Cannella said.

She said those projects could take two or three years. The city already has done some work in anticipation of the decree and has more projects on the drawing board, she said.

Overall, the city must address combined sewer/runoff water overflows, which also had drawn a lawsuit from the Tennessee Clean Water Network.

The consent decree says the city must make massive improvements over 16 years, with the bulk of projects coming within the first five years. City officials hiked sewer fees last year to begin paying to solve the problems.

At their June 25 meeting, Tennessee Local Development Authority members approved more than $203 million in low-interest loans and grants for 11 communities statewide.

Among them was a $4 million, 20-year loan for the Hamilton County Water and Wasterwater Treatment Authority. The authority will only have to pay back $3.6 million of the loan, which will go toward infiltration and inflow correction problems.

In a statement, Gov. Bill Haslam said he is "pleased to see local governments using this important program to help address critical drinking water and wastewater needs, making infrastructure improvements that will benefit the health of these communities and economic growth."